Property deals worth nearly $646 million (BD243,017,022) were done during the first quarter of 2023 in Bahrain, shows a new report.

Local firm ASK Real Estate’s analysis of the sector concludes that growth of 14.5 per cent in the number of real estate transactions to 6,336 during Q1-2023 when compared with 5,533 in the same period last year demonstrates that Bahrain’s property market has performed well despite global challenges.

The report notes that the failure of several US regional banks is expected to result in marked tightening of credit conditions across the globe. As a result, the global property market is expected to slow down.

In Bahrain, real estate transactions by non-Bahraini GCC nationals and foreigners saw a slight increase during the quarter, it adds.

The value of Gulf real estate transactions amounted to BD15.427m in the first quarter of the current year, increasing from BD10.407m last year, whereas the value of foreign real estate transactions was BD17.057m in Q1 this year, compared with BD12.857m in the same period last year.

Quoting government data, the report said real estate and business activities grew at 1.1pc at constant prices in Q4 of 2022 compared with Q4 of 2021 with the sector’s contribution to the national GDP rising to 3.32pc in Q4-2022, an increase of 5.34pc compared with 2021.

Commenting on trends spotted in the report, Karim Yazji, chief executive at ASK Real Estate, said, “This report highlights the key changes in the real estate sector in Bahrain in the midst of the global economic challenges that affected many sectors. The collapse of some large US banks, along with the rise in interest rates, has led to an increase in the cost of borrowing globally, thus a scarcity in financing real estate investments. In Bahrain, we have witnessed some of the effects of these global events. However, it is clear to us that the real estate sector in Bahrain has maintained its strength and stability during the first months of this year.

“We expect the real estate sector in the kingdom to see slight growth in the coming months,” he added.

The report stated that newly launched housing financing services have supported the growth of the sector. In addition to that, the positive outlook of the sector is supported by the ‘Sharaka’ programme, which allows private developers to bid for contracts for government land.

It goes in line with the government’s commitment to strengthening its partnership with the private sector and providing quality houses for citizens.

The report noted that low level of demand for offices continued even as tenants sought new greener buildings.

The retail sector is expected to see a boost in supply with the completion of the expansion of The Avenues Mall. Prime yields for retail investments are in the order of 7-8pc and rentals range between BD9 and BD15 per sqm, while the indicative yield for prime industrial properties in Bahrain is 8-10pc and rentals are between BD3 and BD5 per square metre.

Vacancy rates across the commercial market hover around 40pc with best-in-class schemes commanding better occupancy levels, says the report.

 

Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).